A Look Behind the Texas Renewable Portfolio Standard - Energy.gov · 2014. 5. 19. · Renewable...
Transcript of A Look Behind the Texas Renewable Portfolio Standard - Energy.gov · 2014. 5. 19. · Renewable...
A Look Behind the Texas Renewable Portfolio Standard
David Hurlbut PhD National Renewable Energy Laboratory
State Local and Tribal Integrated Analysis Group
Strategic Energy Analysis and Applications Center
April 16 2008
Session objectives
bull Provide an insiderrsquos perspective on howthe Texas RPS works
bull Identify complementary policies thathave helped
bull Highlight the key insights that may beapplicable to other states
bull Open discussion
2
Why look at Texas
bull One of the oldest RPS programs it has a history of problems and solutions
bull Less is known about it key aspects of electricity in Texas are outside the federal sphere
bull It works
3
4
Generation from renewable energy greatest increases since 2001
Energy Information Administration
5
Growth and use of renewable generating capacity in Texas
Future RPS requirements
Quick facts about Texas
bull Restructured ndash 1995 Wholesale competition began ndash 2002 Retail competition began with RPS
bull Most of Texas is in ERCOT RTO ndash 2001 ERCOT became single power control area ndash No bundled IOUs in ERCOT meaning of ldquoutilityrdquo
limited to transmission provider ndash ERCOT RTO is regulated by Texas PUC not by
FERC
6
Quick facts about Texas
bull Retail electric providers (in ERCOT) ndash Serve retail customers have RPS obligation ndash Do not own generation ndash Set their own rates but no guaranteed customer base
bull Power generating companies (in ERCOT) ndash Do not serve retail customers have no RPS obligation ndash Can earn RECs for eligible resources ndash Set their own wholesale prices but no guaranteed sales
bull Bundled utilities (outside ERCOT) ndash Have RPS obligation can earn RECs for eligible resources
bull Municipally owned utilities electric cooperatives 7ndash No RPS obligation unless they opt into competition
Quick facts about Texas
bull RPS began with modest goal of 2 GW of newcapacity by 2009
bull Texas reached 2009 goal in 2005 but transmission limitations reduced amount of electricity the grid could accommodate
bull In 2005 the Legislature increased the RPSgoal to 5 GW by 2015 created CompetitiveRenewable Energy Zones (CREZs)
8
Lessons learned
bull Real goal is renewable energy that iseconomically sustainable
bull Competition works bull An RPS REC tracking and green power are
best implemented as package bull RPS goal should leave room for green power
to grow bull Rules must be stable
9
How PUCT approached RPS implementation
bull The RPS should not be ldquothe whole enchiladardquo for Texas renewables ndash The RPS mandate was a social
commitment made by the Legislature to beapplied equitably to everyone
ndash Some consumers want to do more and are entitled to do so through voluntary greenpower purchases
10
How PUCT approached RPS implementation
bull Create a standard currency for renewable energy applicable to any use
bull Make renewable energy developers compete with each other
bull Make it easy for retail customers to choose green power
11
Texas RECs
bull Texas was the first RPS to incorporate a RECtracking system
bull Nearly all REC activity is done via Internetweb portal
bull Turns renewable power into an easily traded commodity reducing transaction costs
bull RECs eliminate the need for an omnibus compliance docket PUC checks for violationsby REPs shortly after settlement deadline
12
Major REC design decisions
bull How long should they be valid ndash Long enough to enable risk management ndash Short enough to avoid clogging the market ndash Decision three years
bull How much information ndash Should be commercially useful ndash Decision date unit energy source
13
Competition among developers
bull Nondiscriminatory access to ERCOT transmission system
bull RPS was a guaranteed minimum demand but no one was guaranteed a piece of the pie
bull Green power could make the pie bigger as long as prices were reasonable
14
RPS and green power
bull Need to ensure customers have quality information for making choices that satisfy their diverse preferences
bull Need to protect customers against deceptive trade practices
15
Information for consumer choice
bull All REPs are required to provide eachresidential and small commercial customer with an Electricity Facts Label(EFL) describing the service purchased
bull Customers can find and compare all EFLs on the PUC web site ndash wwwpowertochoseorg
16
17
EFL for typical service
18
EFL for green power
Deceptive trade practices
bull Problem of fraudulent double-counting ndash A REC is a private good (ie exclusive and
rivalrous) ndash A customer buying a REC (or service backed by it)
expects full and exclusive entitlement to the powerit represents That expectation is violated ifanother party appropriates value from that sameREC The customer is harmed because the premium paid no longer conveys exclusive value
19
Deterrents to deceptive practices
bull Require RECs for green power ndash ldquo[T]he retirement of RECs shall be the only
method of authenticating generation forwhich a REC has been issuedrdquo
bull Prohibit loading RPS onto one productand selling it as green power ndash Mandatory RECs must be applied pro rata
to each EFL
20
Current issues CREZs
bull Current RPS contains both a mathematically allocated mandate (5 GW by 2015) and a target (10 GW by 2025)
bull PUC has identified CREZs which will expedite new transmission to connect wind power to load ndash Scenarios under study will accommodate up to 25
GW of installed wind power
21
Current issues non-wind target
bull 2005 legislation increasing the RPSalso set a target for non-windrenewables (500 MW) ndash Unclear whether law authorized non-wind
mandate ndash Chosen strategy provide RPS premiums in
addition to RECs for eligible non-wind renewables
22
Lessons learned
bull Real goal is renewable energy that is economicallysustainable
bull Competition works bull An RPS REC tracking and green power are best
implemented as package bull RPS goal should leave room for green power to grow bull Rules must be stable
23
Questions
David Hurlbut PhD National Renewable Energy Laboratory
david_hurlbutnrelgov
Session objectives
bull Provide an insiderrsquos perspective on howthe Texas RPS works
bull Identify complementary policies thathave helped
bull Highlight the key insights that may beapplicable to other states
bull Open discussion
2
Why look at Texas
bull One of the oldest RPS programs it has a history of problems and solutions
bull Less is known about it key aspects of electricity in Texas are outside the federal sphere
bull It works
3
4
Generation from renewable energy greatest increases since 2001
Energy Information Administration
5
Growth and use of renewable generating capacity in Texas
Future RPS requirements
Quick facts about Texas
bull Restructured ndash 1995 Wholesale competition began ndash 2002 Retail competition began with RPS
bull Most of Texas is in ERCOT RTO ndash 2001 ERCOT became single power control area ndash No bundled IOUs in ERCOT meaning of ldquoutilityrdquo
limited to transmission provider ndash ERCOT RTO is regulated by Texas PUC not by
FERC
6
Quick facts about Texas
bull Retail electric providers (in ERCOT) ndash Serve retail customers have RPS obligation ndash Do not own generation ndash Set their own rates but no guaranteed customer base
bull Power generating companies (in ERCOT) ndash Do not serve retail customers have no RPS obligation ndash Can earn RECs for eligible resources ndash Set their own wholesale prices but no guaranteed sales
bull Bundled utilities (outside ERCOT) ndash Have RPS obligation can earn RECs for eligible resources
bull Municipally owned utilities electric cooperatives 7ndash No RPS obligation unless they opt into competition
Quick facts about Texas
bull RPS began with modest goal of 2 GW of newcapacity by 2009
bull Texas reached 2009 goal in 2005 but transmission limitations reduced amount of electricity the grid could accommodate
bull In 2005 the Legislature increased the RPSgoal to 5 GW by 2015 created CompetitiveRenewable Energy Zones (CREZs)
8
Lessons learned
bull Real goal is renewable energy that iseconomically sustainable
bull Competition works bull An RPS REC tracking and green power are
best implemented as package bull RPS goal should leave room for green power
to grow bull Rules must be stable
9
How PUCT approached RPS implementation
bull The RPS should not be ldquothe whole enchiladardquo for Texas renewables ndash The RPS mandate was a social
commitment made by the Legislature to beapplied equitably to everyone
ndash Some consumers want to do more and are entitled to do so through voluntary greenpower purchases
10
How PUCT approached RPS implementation
bull Create a standard currency for renewable energy applicable to any use
bull Make renewable energy developers compete with each other
bull Make it easy for retail customers to choose green power
11
Texas RECs
bull Texas was the first RPS to incorporate a RECtracking system
bull Nearly all REC activity is done via Internetweb portal
bull Turns renewable power into an easily traded commodity reducing transaction costs
bull RECs eliminate the need for an omnibus compliance docket PUC checks for violationsby REPs shortly after settlement deadline
12
Major REC design decisions
bull How long should they be valid ndash Long enough to enable risk management ndash Short enough to avoid clogging the market ndash Decision three years
bull How much information ndash Should be commercially useful ndash Decision date unit energy source
13
Competition among developers
bull Nondiscriminatory access to ERCOT transmission system
bull RPS was a guaranteed minimum demand but no one was guaranteed a piece of the pie
bull Green power could make the pie bigger as long as prices were reasonable
14
RPS and green power
bull Need to ensure customers have quality information for making choices that satisfy their diverse preferences
bull Need to protect customers against deceptive trade practices
15
Information for consumer choice
bull All REPs are required to provide eachresidential and small commercial customer with an Electricity Facts Label(EFL) describing the service purchased
bull Customers can find and compare all EFLs on the PUC web site ndash wwwpowertochoseorg
16
17
EFL for typical service
18
EFL for green power
Deceptive trade practices
bull Problem of fraudulent double-counting ndash A REC is a private good (ie exclusive and
rivalrous) ndash A customer buying a REC (or service backed by it)
expects full and exclusive entitlement to the powerit represents That expectation is violated ifanother party appropriates value from that sameREC The customer is harmed because the premium paid no longer conveys exclusive value
19
Deterrents to deceptive practices
bull Require RECs for green power ndash ldquo[T]he retirement of RECs shall be the only
method of authenticating generation forwhich a REC has been issuedrdquo
bull Prohibit loading RPS onto one productand selling it as green power ndash Mandatory RECs must be applied pro rata
to each EFL
20
Current issues CREZs
bull Current RPS contains both a mathematically allocated mandate (5 GW by 2015) and a target (10 GW by 2025)
bull PUC has identified CREZs which will expedite new transmission to connect wind power to load ndash Scenarios under study will accommodate up to 25
GW of installed wind power
21
Current issues non-wind target
bull 2005 legislation increasing the RPSalso set a target for non-windrenewables (500 MW) ndash Unclear whether law authorized non-wind
mandate ndash Chosen strategy provide RPS premiums in
addition to RECs for eligible non-wind renewables
22
Lessons learned
bull Real goal is renewable energy that is economicallysustainable
bull Competition works bull An RPS REC tracking and green power are best
implemented as package bull RPS goal should leave room for green power to grow bull Rules must be stable
23
Questions
David Hurlbut PhD National Renewable Energy Laboratory
david_hurlbutnrelgov
Why look at Texas
bull One of the oldest RPS programs it has a history of problems and solutions
bull Less is known about it key aspects of electricity in Texas are outside the federal sphere
bull It works
3
4
Generation from renewable energy greatest increases since 2001
Energy Information Administration
5
Growth and use of renewable generating capacity in Texas
Future RPS requirements
Quick facts about Texas
bull Restructured ndash 1995 Wholesale competition began ndash 2002 Retail competition began with RPS
bull Most of Texas is in ERCOT RTO ndash 2001 ERCOT became single power control area ndash No bundled IOUs in ERCOT meaning of ldquoutilityrdquo
limited to transmission provider ndash ERCOT RTO is regulated by Texas PUC not by
FERC
6
Quick facts about Texas
bull Retail electric providers (in ERCOT) ndash Serve retail customers have RPS obligation ndash Do not own generation ndash Set their own rates but no guaranteed customer base
bull Power generating companies (in ERCOT) ndash Do not serve retail customers have no RPS obligation ndash Can earn RECs for eligible resources ndash Set their own wholesale prices but no guaranteed sales
bull Bundled utilities (outside ERCOT) ndash Have RPS obligation can earn RECs for eligible resources
bull Municipally owned utilities electric cooperatives 7ndash No RPS obligation unless they opt into competition
Quick facts about Texas
bull RPS began with modest goal of 2 GW of newcapacity by 2009
bull Texas reached 2009 goal in 2005 but transmission limitations reduced amount of electricity the grid could accommodate
bull In 2005 the Legislature increased the RPSgoal to 5 GW by 2015 created CompetitiveRenewable Energy Zones (CREZs)
8
Lessons learned
bull Real goal is renewable energy that iseconomically sustainable
bull Competition works bull An RPS REC tracking and green power are
best implemented as package bull RPS goal should leave room for green power
to grow bull Rules must be stable
9
How PUCT approached RPS implementation
bull The RPS should not be ldquothe whole enchiladardquo for Texas renewables ndash The RPS mandate was a social
commitment made by the Legislature to beapplied equitably to everyone
ndash Some consumers want to do more and are entitled to do so through voluntary greenpower purchases
10
How PUCT approached RPS implementation
bull Create a standard currency for renewable energy applicable to any use
bull Make renewable energy developers compete with each other
bull Make it easy for retail customers to choose green power
11
Texas RECs
bull Texas was the first RPS to incorporate a RECtracking system
bull Nearly all REC activity is done via Internetweb portal
bull Turns renewable power into an easily traded commodity reducing transaction costs
bull RECs eliminate the need for an omnibus compliance docket PUC checks for violationsby REPs shortly after settlement deadline
12
Major REC design decisions
bull How long should they be valid ndash Long enough to enable risk management ndash Short enough to avoid clogging the market ndash Decision three years
bull How much information ndash Should be commercially useful ndash Decision date unit energy source
13
Competition among developers
bull Nondiscriminatory access to ERCOT transmission system
bull RPS was a guaranteed minimum demand but no one was guaranteed a piece of the pie
bull Green power could make the pie bigger as long as prices were reasonable
14
RPS and green power
bull Need to ensure customers have quality information for making choices that satisfy their diverse preferences
bull Need to protect customers against deceptive trade practices
15
Information for consumer choice
bull All REPs are required to provide eachresidential and small commercial customer with an Electricity Facts Label(EFL) describing the service purchased
bull Customers can find and compare all EFLs on the PUC web site ndash wwwpowertochoseorg
16
17
EFL for typical service
18
EFL for green power
Deceptive trade practices
bull Problem of fraudulent double-counting ndash A REC is a private good (ie exclusive and
rivalrous) ndash A customer buying a REC (or service backed by it)
expects full and exclusive entitlement to the powerit represents That expectation is violated ifanother party appropriates value from that sameREC The customer is harmed because the premium paid no longer conveys exclusive value
19
Deterrents to deceptive practices
bull Require RECs for green power ndash ldquo[T]he retirement of RECs shall be the only
method of authenticating generation forwhich a REC has been issuedrdquo
bull Prohibit loading RPS onto one productand selling it as green power ndash Mandatory RECs must be applied pro rata
to each EFL
20
Current issues CREZs
bull Current RPS contains both a mathematically allocated mandate (5 GW by 2015) and a target (10 GW by 2025)
bull PUC has identified CREZs which will expedite new transmission to connect wind power to load ndash Scenarios under study will accommodate up to 25
GW of installed wind power
21
Current issues non-wind target
bull 2005 legislation increasing the RPSalso set a target for non-windrenewables (500 MW) ndash Unclear whether law authorized non-wind
mandate ndash Chosen strategy provide RPS premiums in
addition to RECs for eligible non-wind renewables
22
Lessons learned
bull Real goal is renewable energy that is economicallysustainable
bull Competition works bull An RPS REC tracking and green power are best
implemented as package bull RPS goal should leave room for green power to grow bull Rules must be stable
23
Questions
David Hurlbut PhD National Renewable Energy Laboratory
david_hurlbutnrelgov
4
Generation from renewable energy greatest increases since 2001
Energy Information Administration
5
Growth and use of renewable generating capacity in Texas
Future RPS requirements
Quick facts about Texas
bull Restructured ndash 1995 Wholesale competition began ndash 2002 Retail competition began with RPS
bull Most of Texas is in ERCOT RTO ndash 2001 ERCOT became single power control area ndash No bundled IOUs in ERCOT meaning of ldquoutilityrdquo
limited to transmission provider ndash ERCOT RTO is regulated by Texas PUC not by
FERC
6
Quick facts about Texas
bull Retail electric providers (in ERCOT) ndash Serve retail customers have RPS obligation ndash Do not own generation ndash Set their own rates but no guaranteed customer base
bull Power generating companies (in ERCOT) ndash Do not serve retail customers have no RPS obligation ndash Can earn RECs for eligible resources ndash Set their own wholesale prices but no guaranteed sales
bull Bundled utilities (outside ERCOT) ndash Have RPS obligation can earn RECs for eligible resources
bull Municipally owned utilities electric cooperatives 7ndash No RPS obligation unless they opt into competition
Quick facts about Texas
bull RPS began with modest goal of 2 GW of newcapacity by 2009
bull Texas reached 2009 goal in 2005 but transmission limitations reduced amount of electricity the grid could accommodate
bull In 2005 the Legislature increased the RPSgoal to 5 GW by 2015 created CompetitiveRenewable Energy Zones (CREZs)
8
Lessons learned
bull Real goal is renewable energy that iseconomically sustainable
bull Competition works bull An RPS REC tracking and green power are
best implemented as package bull RPS goal should leave room for green power
to grow bull Rules must be stable
9
How PUCT approached RPS implementation
bull The RPS should not be ldquothe whole enchiladardquo for Texas renewables ndash The RPS mandate was a social
commitment made by the Legislature to beapplied equitably to everyone
ndash Some consumers want to do more and are entitled to do so through voluntary greenpower purchases
10
How PUCT approached RPS implementation
bull Create a standard currency for renewable energy applicable to any use
bull Make renewable energy developers compete with each other
bull Make it easy for retail customers to choose green power
11
Texas RECs
bull Texas was the first RPS to incorporate a RECtracking system
bull Nearly all REC activity is done via Internetweb portal
bull Turns renewable power into an easily traded commodity reducing transaction costs
bull RECs eliminate the need for an omnibus compliance docket PUC checks for violationsby REPs shortly after settlement deadline
12
Major REC design decisions
bull How long should they be valid ndash Long enough to enable risk management ndash Short enough to avoid clogging the market ndash Decision three years
bull How much information ndash Should be commercially useful ndash Decision date unit energy source
13
Competition among developers
bull Nondiscriminatory access to ERCOT transmission system
bull RPS was a guaranteed minimum demand but no one was guaranteed a piece of the pie
bull Green power could make the pie bigger as long as prices were reasonable
14
RPS and green power
bull Need to ensure customers have quality information for making choices that satisfy their diverse preferences
bull Need to protect customers against deceptive trade practices
15
Information for consumer choice
bull All REPs are required to provide eachresidential and small commercial customer with an Electricity Facts Label(EFL) describing the service purchased
bull Customers can find and compare all EFLs on the PUC web site ndash wwwpowertochoseorg
16
17
EFL for typical service
18
EFL for green power
Deceptive trade practices
bull Problem of fraudulent double-counting ndash A REC is a private good (ie exclusive and
rivalrous) ndash A customer buying a REC (or service backed by it)
expects full and exclusive entitlement to the powerit represents That expectation is violated ifanother party appropriates value from that sameREC The customer is harmed because the premium paid no longer conveys exclusive value
19
Deterrents to deceptive practices
bull Require RECs for green power ndash ldquo[T]he retirement of RECs shall be the only
method of authenticating generation forwhich a REC has been issuedrdquo
bull Prohibit loading RPS onto one productand selling it as green power ndash Mandatory RECs must be applied pro rata
to each EFL
20
Current issues CREZs
bull Current RPS contains both a mathematically allocated mandate (5 GW by 2015) and a target (10 GW by 2025)
bull PUC has identified CREZs which will expedite new transmission to connect wind power to load ndash Scenarios under study will accommodate up to 25
GW of installed wind power
21
Current issues non-wind target
bull 2005 legislation increasing the RPSalso set a target for non-windrenewables (500 MW) ndash Unclear whether law authorized non-wind
mandate ndash Chosen strategy provide RPS premiums in
addition to RECs for eligible non-wind renewables
22
Lessons learned
bull Real goal is renewable energy that is economicallysustainable
bull Competition works bull An RPS REC tracking and green power are best
implemented as package bull RPS goal should leave room for green power to grow bull Rules must be stable
23
Questions
David Hurlbut PhD National Renewable Energy Laboratory
david_hurlbutnrelgov
5
Growth and use of renewable generating capacity in Texas
Future RPS requirements
Quick facts about Texas
bull Restructured ndash 1995 Wholesale competition began ndash 2002 Retail competition began with RPS
bull Most of Texas is in ERCOT RTO ndash 2001 ERCOT became single power control area ndash No bundled IOUs in ERCOT meaning of ldquoutilityrdquo
limited to transmission provider ndash ERCOT RTO is regulated by Texas PUC not by
FERC
6
Quick facts about Texas
bull Retail electric providers (in ERCOT) ndash Serve retail customers have RPS obligation ndash Do not own generation ndash Set their own rates but no guaranteed customer base
bull Power generating companies (in ERCOT) ndash Do not serve retail customers have no RPS obligation ndash Can earn RECs for eligible resources ndash Set their own wholesale prices but no guaranteed sales
bull Bundled utilities (outside ERCOT) ndash Have RPS obligation can earn RECs for eligible resources
bull Municipally owned utilities electric cooperatives 7ndash No RPS obligation unless they opt into competition
Quick facts about Texas
bull RPS began with modest goal of 2 GW of newcapacity by 2009
bull Texas reached 2009 goal in 2005 but transmission limitations reduced amount of electricity the grid could accommodate
bull In 2005 the Legislature increased the RPSgoal to 5 GW by 2015 created CompetitiveRenewable Energy Zones (CREZs)
8
Lessons learned
bull Real goal is renewable energy that iseconomically sustainable
bull Competition works bull An RPS REC tracking and green power are
best implemented as package bull RPS goal should leave room for green power
to grow bull Rules must be stable
9
How PUCT approached RPS implementation
bull The RPS should not be ldquothe whole enchiladardquo for Texas renewables ndash The RPS mandate was a social
commitment made by the Legislature to beapplied equitably to everyone
ndash Some consumers want to do more and are entitled to do so through voluntary greenpower purchases
10
How PUCT approached RPS implementation
bull Create a standard currency for renewable energy applicable to any use
bull Make renewable energy developers compete with each other
bull Make it easy for retail customers to choose green power
11
Texas RECs
bull Texas was the first RPS to incorporate a RECtracking system
bull Nearly all REC activity is done via Internetweb portal
bull Turns renewable power into an easily traded commodity reducing transaction costs
bull RECs eliminate the need for an omnibus compliance docket PUC checks for violationsby REPs shortly after settlement deadline
12
Major REC design decisions
bull How long should they be valid ndash Long enough to enable risk management ndash Short enough to avoid clogging the market ndash Decision three years
bull How much information ndash Should be commercially useful ndash Decision date unit energy source
13
Competition among developers
bull Nondiscriminatory access to ERCOT transmission system
bull RPS was a guaranteed minimum demand but no one was guaranteed a piece of the pie
bull Green power could make the pie bigger as long as prices were reasonable
14
RPS and green power
bull Need to ensure customers have quality information for making choices that satisfy their diverse preferences
bull Need to protect customers against deceptive trade practices
15
Information for consumer choice
bull All REPs are required to provide eachresidential and small commercial customer with an Electricity Facts Label(EFL) describing the service purchased
bull Customers can find and compare all EFLs on the PUC web site ndash wwwpowertochoseorg
16
17
EFL for typical service
18
EFL for green power
Deceptive trade practices
bull Problem of fraudulent double-counting ndash A REC is a private good (ie exclusive and
rivalrous) ndash A customer buying a REC (or service backed by it)
expects full and exclusive entitlement to the powerit represents That expectation is violated ifanother party appropriates value from that sameREC The customer is harmed because the premium paid no longer conveys exclusive value
19
Deterrents to deceptive practices
bull Require RECs for green power ndash ldquo[T]he retirement of RECs shall be the only
method of authenticating generation forwhich a REC has been issuedrdquo
bull Prohibit loading RPS onto one productand selling it as green power ndash Mandatory RECs must be applied pro rata
to each EFL
20
Current issues CREZs
bull Current RPS contains both a mathematically allocated mandate (5 GW by 2015) and a target (10 GW by 2025)
bull PUC has identified CREZs which will expedite new transmission to connect wind power to load ndash Scenarios under study will accommodate up to 25
GW of installed wind power
21
Current issues non-wind target
bull 2005 legislation increasing the RPSalso set a target for non-windrenewables (500 MW) ndash Unclear whether law authorized non-wind
mandate ndash Chosen strategy provide RPS premiums in
addition to RECs for eligible non-wind renewables
22
Lessons learned
bull Real goal is renewable energy that is economicallysustainable
bull Competition works bull An RPS REC tracking and green power are best
implemented as package bull RPS goal should leave room for green power to grow bull Rules must be stable
23
Questions
David Hurlbut PhD National Renewable Energy Laboratory
david_hurlbutnrelgov
Quick facts about Texas
bull Restructured ndash 1995 Wholesale competition began ndash 2002 Retail competition began with RPS
bull Most of Texas is in ERCOT RTO ndash 2001 ERCOT became single power control area ndash No bundled IOUs in ERCOT meaning of ldquoutilityrdquo
limited to transmission provider ndash ERCOT RTO is regulated by Texas PUC not by
FERC
6
Quick facts about Texas
bull Retail electric providers (in ERCOT) ndash Serve retail customers have RPS obligation ndash Do not own generation ndash Set their own rates but no guaranteed customer base
bull Power generating companies (in ERCOT) ndash Do not serve retail customers have no RPS obligation ndash Can earn RECs for eligible resources ndash Set their own wholesale prices but no guaranteed sales
bull Bundled utilities (outside ERCOT) ndash Have RPS obligation can earn RECs for eligible resources
bull Municipally owned utilities electric cooperatives 7ndash No RPS obligation unless they opt into competition
Quick facts about Texas
bull RPS began with modest goal of 2 GW of newcapacity by 2009
bull Texas reached 2009 goal in 2005 but transmission limitations reduced amount of electricity the grid could accommodate
bull In 2005 the Legislature increased the RPSgoal to 5 GW by 2015 created CompetitiveRenewable Energy Zones (CREZs)
8
Lessons learned
bull Real goal is renewable energy that iseconomically sustainable
bull Competition works bull An RPS REC tracking and green power are
best implemented as package bull RPS goal should leave room for green power
to grow bull Rules must be stable
9
How PUCT approached RPS implementation
bull The RPS should not be ldquothe whole enchiladardquo for Texas renewables ndash The RPS mandate was a social
commitment made by the Legislature to beapplied equitably to everyone
ndash Some consumers want to do more and are entitled to do so through voluntary greenpower purchases
10
How PUCT approached RPS implementation
bull Create a standard currency for renewable energy applicable to any use
bull Make renewable energy developers compete with each other
bull Make it easy for retail customers to choose green power
11
Texas RECs
bull Texas was the first RPS to incorporate a RECtracking system
bull Nearly all REC activity is done via Internetweb portal
bull Turns renewable power into an easily traded commodity reducing transaction costs
bull RECs eliminate the need for an omnibus compliance docket PUC checks for violationsby REPs shortly after settlement deadline
12
Major REC design decisions
bull How long should they be valid ndash Long enough to enable risk management ndash Short enough to avoid clogging the market ndash Decision three years
bull How much information ndash Should be commercially useful ndash Decision date unit energy source
13
Competition among developers
bull Nondiscriminatory access to ERCOT transmission system
bull RPS was a guaranteed minimum demand but no one was guaranteed a piece of the pie
bull Green power could make the pie bigger as long as prices were reasonable
14
RPS and green power
bull Need to ensure customers have quality information for making choices that satisfy their diverse preferences
bull Need to protect customers against deceptive trade practices
15
Information for consumer choice
bull All REPs are required to provide eachresidential and small commercial customer with an Electricity Facts Label(EFL) describing the service purchased
bull Customers can find and compare all EFLs on the PUC web site ndash wwwpowertochoseorg
16
17
EFL for typical service
18
EFL for green power
Deceptive trade practices
bull Problem of fraudulent double-counting ndash A REC is a private good (ie exclusive and
rivalrous) ndash A customer buying a REC (or service backed by it)
expects full and exclusive entitlement to the powerit represents That expectation is violated ifanother party appropriates value from that sameREC The customer is harmed because the premium paid no longer conveys exclusive value
19
Deterrents to deceptive practices
bull Require RECs for green power ndash ldquo[T]he retirement of RECs shall be the only
method of authenticating generation forwhich a REC has been issuedrdquo
bull Prohibit loading RPS onto one productand selling it as green power ndash Mandatory RECs must be applied pro rata
to each EFL
20
Current issues CREZs
bull Current RPS contains both a mathematically allocated mandate (5 GW by 2015) and a target (10 GW by 2025)
bull PUC has identified CREZs which will expedite new transmission to connect wind power to load ndash Scenarios under study will accommodate up to 25
GW of installed wind power
21
Current issues non-wind target
bull 2005 legislation increasing the RPSalso set a target for non-windrenewables (500 MW) ndash Unclear whether law authorized non-wind
mandate ndash Chosen strategy provide RPS premiums in
addition to RECs for eligible non-wind renewables
22
Lessons learned
bull Real goal is renewable energy that is economicallysustainable
bull Competition works bull An RPS REC tracking and green power are best
implemented as package bull RPS goal should leave room for green power to grow bull Rules must be stable
23
Questions
David Hurlbut PhD National Renewable Energy Laboratory
david_hurlbutnrelgov
Quick facts about Texas
bull Retail electric providers (in ERCOT) ndash Serve retail customers have RPS obligation ndash Do not own generation ndash Set their own rates but no guaranteed customer base
bull Power generating companies (in ERCOT) ndash Do not serve retail customers have no RPS obligation ndash Can earn RECs for eligible resources ndash Set their own wholesale prices but no guaranteed sales
bull Bundled utilities (outside ERCOT) ndash Have RPS obligation can earn RECs for eligible resources
bull Municipally owned utilities electric cooperatives 7ndash No RPS obligation unless they opt into competition
Quick facts about Texas
bull RPS began with modest goal of 2 GW of newcapacity by 2009
bull Texas reached 2009 goal in 2005 but transmission limitations reduced amount of electricity the grid could accommodate
bull In 2005 the Legislature increased the RPSgoal to 5 GW by 2015 created CompetitiveRenewable Energy Zones (CREZs)
8
Lessons learned
bull Real goal is renewable energy that iseconomically sustainable
bull Competition works bull An RPS REC tracking and green power are
best implemented as package bull RPS goal should leave room for green power
to grow bull Rules must be stable
9
How PUCT approached RPS implementation
bull The RPS should not be ldquothe whole enchiladardquo for Texas renewables ndash The RPS mandate was a social
commitment made by the Legislature to beapplied equitably to everyone
ndash Some consumers want to do more and are entitled to do so through voluntary greenpower purchases
10
How PUCT approached RPS implementation
bull Create a standard currency for renewable energy applicable to any use
bull Make renewable energy developers compete with each other
bull Make it easy for retail customers to choose green power
11
Texas RECs
bull Texas was the first RPS to incorporate a RECtracking system
bull Nearly all REC activity is done via Internetweb portal
bull Turns renewable power into an easily traded commodity reducing transaction costs
bull RECs eliminate the need for an omnibus compliance docket PUC checks for violationsby REPs shortly after settlement deadline
12
Major REC design decisions
bull How long should they be valid ndash Long enough to enable risk management ndash Short enough to avoid clogging the market ndash Decision three years
bull How much information ndash Should be commercially useful ndash Decision date unit energy source
13
Competition among developers
bull Nondiscriminatory access to ERCOT transmission system
bull RPS was a guaranteed minimum demand but no one was guaranteed a piece of the pie
bull Green power could make the pie bigger as long as prices were reasonable
14
RPS and green power
bull Need to ensure customers have quality information for making choices that satisfy their diverse preferences
bull Need to protect customers against deceptive trade practices
15
Information for consumer choice
bull All REPs are required to provide eachresidential and small commercial customer with an Electricity Facts Label(EFL) describing the service purchased
bull Customers can find and compare all EFLs on the PUC web site ndash wwwpowertochoseorg
16
17
EFL for typical service
18
EFL for green power
Deceptive trade practices
bull Problem of fraudulent double-counting ndash A REC is a private good (ie exclusive and
rivalrous) ndash A customer buying a REC (or service backed by it)
expects full and exclusive entitlement to the powerit represents That expectation is violated ifanother party appropriates value from that sameREC The customer is harmed because the premium paid no longer conveys exclusive value
19
Deterrents to deceptive practices
bull Require RECs for green power ndash ldquo[T]he retirement of RECs shall be the only
method of authenticating generation forwhich a REC has been issuedrdquo
bull Prohibit loading RPS onto one productand selling it as green power ndash Mandatory RECs must be applied pro rata
to each EFL
20
Current issues CREZs
bull Current RPS contains both a mathematically allocated mandate (5 GW by 2015) and a target (10 GW by 2025)
bull PUC has identified CREZs which will expedite new transmission to connect wind power to load ndash Scenarios under study will accommodate up to 25
GW of installed wind power
21
Current issues non-wind target
bull 2005 legislation increasing the RPSalso set a target for non-windrenewables (500 MW) ndash Unclear whether law authorized non-wind
mandate ndash Chosen strategy provide RPS premiums in
addition to RECs for eligible non-wind renewables
22
Lessons learned
bull Real goal is renewable energy that is economicallysustainable
bull Competition works bull An RPS REC tracking and green power are best
implemented as package bull RPS goal should leave room for green power to grow bull Rules must be stable
23
Questions
David Hurlbut PhD National Renewable Energy Laboratory
david_hurlbutnrelgov
Quick facts about Texas
bull RPS began with modest goal of 2 GW of newcapacity by 2009
bull Texas reached 2009 goal in 2005 but transmission limitations reduced amount of electricity the grid could accommodate
bull In 2005 the Legislature increased the RPSgoal to 5 GW by 2015 created CompetitiveRenewable Energy Zones (CREZs)
8
Lessons learned
bull Real goal is renewable energy that iseconomically sustainable
bull Competition works bull An RPS REC tracking and green power are
best implemented as package bull RPS goal should leave room for green power
to grow bull Rules must be stable
9
How PUCT approached RPS implementation
bull The RPS should not be ldquothe whole enchiladardquo for Texas renewables ndash The RPS mandate was a social
commitment made by the Legislature to beapplied equitably to everyone
ndash Some consumers want to do more and are entitled to do so through voluntary greenpower purchases
10
How PUCT approached RPS implementation
bull Create a standard currency for renewable energy applicable to any use
bull Make renewable energy developers compete with each other
bull Make it easy for retail customers to choose green power
11
Texas RECs
bull Texas was the first RPS to incorporate a RECtracking system
bull Nearly all REC activity is done via Internetweb portal
bull Turns renewable power into an easily traded commodity reducing transaction costs
bull RECs eliminate the need for an omnibus compliance docket PUC checks for violationsby REPs shortly after settlement deadline
12
Major REC design decisions
bull How long should they be valid ndash Long enough to enable risk management ndash Short enough to avoid clogging the market ndash Decision three years
bull How much information ndash Should be commercially useful ndash Decision date unit energy source
13
Competition among developers
bull Nondiscriminatory access to ERCOT transmission system
bull RPS was a guaranteed minimum demand but no one was guaranteed a piece of the pie
bull Green power could make the pie bigger as long as prices were reasonable
14
RPS and green power
bull Need to ensure customers have quality information for making choices that satisfy their diverse preferences
bull Need to protect customers against deceptive trade practices
15
Information for consumer choice
bull All REPs are required to provide eachresidential and small commercial customer with an Electricity Facts Label(EFL) describing the service purchased
bull Customers can find and compare all EFLs on the PUC web site ndash wwwpowertochoseorg
16
17
EFL for typical service
18
EFL for green power
Deceptive trade practices
bull Problem of fraudulent double-counting ndash A REC is a private good (ie exclusive and
rivalrous) ndash A customer buying a REC (or service backed by it)
expects full and exclusive entitlement to the powerit represents That expectation is violated ifanother party appropriates value from that sameREC The customer is harmed because the premium paid no longer conveys exclusive value
19
Deterrents to deceptive practices
bull Require RECs for green power ndash ldquo[T]he retirement of RECs shall be the only
method of authenticating generation forwhich a REC has been issuedrdquo
bull Prohibit loading RPS onto one productand selling it as green power ndash Mandatory RECs must be applied pro rata
to each EFL
20
Current issues CREZs
bull Current RPS contains both a mathematically allocated mandate (5 GW by 2015) and a target (10 GW by 2025)
bull PUC has identified CREZs which will expedite new transmission to connect wind power to load ndash Scenarios under study will accommodate up to 25
GW of installed wind power
21
Current issues non-wind target
bull 2005 legislation increasing the RPSalso set a target for non-windrenewables (500 MW) ndash Unclear whether law authorized non-wind
mandate ndash Chosen strategy provide RPS premiums in
addition to RECs for eligible non-wind renewables
22
Lessons learned
bull Real goal is renewable energy that is economicallysustainable
bull Competition works bull An RPS REC tracking and green power are best
implemented as package bull RPS goal should leave room for green power to grow bull Rules must be stable
23
Questions
David Hurlbut PhD National Renewable Energy Laboratory
david_hurlbutnrelgov
Lessons learned
bull Real goal is renewable energy that iseconomically sustainable
bull Competition works bull An RPS REC tracking and green power are
best implemented as package bull RPS goal should leave room for green power
to grow bull Rules must be stable
9
How PUCT approached RPS implementation
bull The RPS should not be ldquothe whole enchiladardquo for Texas renewables ndash The RPS mandate was a social
commitment made by the Legislature to beapplied equitably to everyone
ndash Some consumers want to do more and are entitled to do so through voluntary greenpower purchases
10
How PUCT approached RPS implementation
bull Create a standard currency for renewable energy applicable to any use
bull Make renewable energy developers compete with each other
bull Make it easy for retail customers to choose green power
11
Texas RECs
bull Texas was the first RPS to incorporate a RECtracking system
bull Nearly all REC activity is done via Internetweb portal
bull Turns renewable power into an easily traded commodity reducing transaction costs
bull RECs eliminate the need for an omnibus compliance docket PUC checks for violationsby REPs shortly after settlement deadline
12
Major REC design decisions
bull How long should they be valid ndash Long enough to enable risk management ndash Short enough to avoid clogging the market ndash Decision three years
bull How much information ndash Should be commercially useful ndash Decision date unit energy source
13
Competition among developers
bull Nondiscriminatory access to ERCOT transmission system
bull RPS was a guaranteed minimum demand but no one was guaranteed a piece of the pie
bull Green power could make the pie bigger as long as prices were reasonable
14
RPS and green power
bull Need to ensure customers have quality information for making choices that satisfy their diverse preferences
bull Need to protect customers against deceptive trade practices
15
Information for consumer choice
bull All REPs are required to provide eachresidential and small commercial customer with an Electricity Facts Label(EFL) describing the service purchased
bull Customers can find and compare all EFLs on the PUC web site ndash wwwpowertochoseorg
16
17
EFL for typical service
18
EFL for green power
Deceptive trade practices
bull Problem of fraudulent double-counting ndash A REC is a private good (ie exclusive and
rivalrous) ndash A customer buying a REC (or service backed by it)
expects full and exclusive entitlement to the powerit represents That expectation is violated ifanother party appropriates value from that sameREC The customer is harmed because the premium paid no longer conveys exclusive value
19
Deterrents to deceptive practices
bull Require RECs for green power ndash ldquo[T]he retirement of RECs shall be the only
method of authenticating generation forwhich a REC has been issuedrdquo
bull Prohibit loading RPS onto one productand selling it as green power ndash Mandatory RECs must be applied pro rata
to each EFL
20
Current issues CREZs
bull Current RPS contains both a mathematically allocated mandate (5 GW by 2015) and a target (10 GW by 2025)
bull PUC has identified CREZs which will expedite new transmission to connect wind power to load ndash Scenarios under study will accommodate up to 25
GW of installed wind power
21
Current issues non-wind target
bull 2005 legislation increasing the RPSalso set a target for non-windrenewables (500 MW) ndash Unclear whether law authorized non-wind
mandate ndash Chosen strategy provide RPS premiums in
addition to RECs for eligible non-wind renewables
22
Lessons learned
bull Real goal is renewable energy that is economicallysustainable
bull Competition works bull An RPS REC tracking and green power are best
implemented as package bull RPS goal should leave room for green power to grow bull Rules must be stable
23
Questions
David Hurlbut PhD National Renewable Energy Laboratory
david_hurlbutnrelgov
How PUCT approached RPS implementation
bull The RPS should not be ldquothe whole enchiladardquo for Texas renewables ndash The RPS mandate was a social
commitment made by the Legislature to beapplied equitably to everyone
ndash Some consumers want to do more and are entitled to do so through voluntary greenpower purchases
10
How PUCT approached RPS implementation
bull Create a standard currency for renewable energy applicable to any use
bull Make renewable energy developers compete with each other
bull Make it easy for retail customers to choose green power
11
Texas RECs
bull Texas was the first RPS to incorporate a RECtracking system
bull Nearly all REC activity is done via Internetweb portal
bull Turns renewable power into an easily traded commodity reducing transaction costs
bull RECs eliminate the need for an omnibus compliance docket PUC checks for violationsby REPs shortly after settlement deadline
12
Major REC design decisions
bull How long should they be valid ndash Long enough to enable risk management ndash Short enough to avoid clogging the market ndash Decision three years
bull How much information ndash Should be commercially useful ndash Decision date unit energy source
13
Competition among developers
bull Nondiscriminatory access to ERCOT transmission system
bull RPS was a guaranteed minimum demand but no one was guaranteed a piece of the pie
bull Green power could make the pie bigger as long as prices were reasonable
14
RPS and green power
bull Need to ensure customers have quality information for making choices that satisfy their diverse preferences
bull Need to protect customers against deceptive trade practices
15
Information for consumer choice
bull All REPs are required to provide eachresidential and small commercial customer with an Electricity Facts Label(EFL) describing the service purchased
bull Customers can find and compare all EFLs on the PUC web site ndash wwwpowertochoseorg
16
17
EFL for typical service
18
EFL for green power
Deceptive trade practices
bull Problem of fraudulent double-counting ndash A REC is a private good (ie exclusive and
rivalrous) ndash A customer buying a REC (or service backed by it)
expects full and exclusive entitlement to the powerit represents That expectation is violated ifanother party appropriates value from that sameREC The customer is harmed because the premium paid no longer conveys exclusive value
19
Deterrents to deceptive practices
bull Require RECs for green power ndash ldquo[T]he retirement of RECs shall be the only
method of authenticating generation forwhich a REC has been issuedrdquo
bull Prohibit loading RPS onto one productand selling it as green power ndash Mandatory RECs must be applied pro rata
to each EFL
20
Current issues CREZs
bull Current RPS contains both a mathematically allocated mandate (5 GW by 2015) and a target (10 GW by 2025)
bull PUC has identified CREZs which will expedite new transmission to connect wind power to load ndash Scenarios under study will accommodate up to 25
GW of installed wind power
21
Current issues non-wind target
bull 2005 legislation increasing the RPSalso set a target for non-windrenewables (500 MW) ndash Unclear whether law authorized non-wind
mandate ndash Chosen strategy provide RPS premiums in
addition to RECs for eligible non-wind renewables
22
Lessons learned
bull Real goal is renewable energy that is economicallysustainable
bull Competition works bull An RPS REC tracking and green power are best
implemented as package bull RPS goal should leave room for green power to grow bull Rules must be stable
23
Questions
David Hurlbut PhD National Renewable Energy Laboratory
david_hurlbutnrelgov
How PUCT approached RPS implementation
bull Create a standard currency for renewable energy applicable to any use
bull Make renewable energy developers compete with each other
bull Make it easy for retail customers to choose green power
11
Texas RECs
bull Texas was the first RPS to incorporate a RECtracking system
bull Nearly all REC activity is done via Internetweb portal
bull Turns renewable power into an easily traded commodity reducing transaction costs
bull RECs eliminate the need for an omnibus compliance docket PUC checks for violationsby REPs shortly after settlement deadline
12
Major REC design decisions
bull How long should they be valid ndash Long enough to enable risk management ndash Short enough to avoid clogging the market ndash Decision three years
bull How much information ndash Should be commercially useful ndash Decision date unit energy source
13
Competition among developers
bull Nondiscriminatory access to ERCOT transmission system
bull RPS was a guaranteed minimum demand but no one was guaranteed a piece of the pie
bull Green power could make the pie bigger as long as prices were reasonable
14
RPS and green power
bull Need to ensure customers have quality information for making choices that satisfy their diverse preferences
bull Need to protect customers against deceptive trade practices
15
Information for consumer choice
bull All REPs are required to provide eachresidential and small commercial customer with an Electricity Facts Label(EFL) describing the service purchased
bull Customers can find and compare all EFLs on the PUC web site ndash wwwpowertochoseorg
16
17
EFL for typical service
18
EFL for green power
Deceptive trade practices
bull Problem of fraudulent double-counting ndash A REC is a private good (ie exclusive and
rivalrous) ndash A customer buying a REC (or service backed by it)
expects full and exclusive entitlement to the powerit represents That expectation is violated ifanother party appropriates value from that sameREC The customer is harmed because the premium paid no longer conveys exclusive value
19
Deterrents to deceptive practices
bull Require RECs for green power ndash ldquo[T]he retirement of RECs shall be the only
method of authenticating generation forwhich a REC has been issuedrdquo
bull Prohibit loading RPS onto one productand selling it as green power ndash Mandatory RECs must be applied pro rata
to each EFL
20
Current issues CREZs
bull Current RPS contains both a mathematically allocated mandate (5 GW by 2015) and a target (10 GW by 2025)
bull PUC has identified CREZs which will expedite new transmission to connect wind power to load ndash Scenarios under study will accommodate up to 25
GW of installed wind power
21
Current issues non-wind target
bull 2005 legislation increasing the RPSalso set a target for non-windrenewables (500 MW) ndash Unclear whether law authorized non-wind
mandate ndash Chosen strategy provide RPS premiums in
addition to RECs for eligible non-wind renewables
22
Lessons learned
bull Real goal is renewable energy that is economicallysustainable
bull Competition works bull An RPS REC tracking and green power are best
implemented as package bull RPS goal should leave room for green power to grow bull Rules must be stable
23
Questions
David Hurlbut PhD National Renewable Energy Laboratory
david_hurlbutnrelgov
Texas RECs
bull Texas was the first RPS to incorporate a RECtracking system
bull Nearly all REC activity is done via Internetweb portal
bull Turns renewable power into an easily traded commodity reducing transaction costs
bull RECs eliminate the need for an omnibus compliance docket PUC checks for violationsby REPs shortly after settlement deadline
12
Major REC design decisions
bull How long should they be valid ndash Long enough to enable risk management ndash Short enough to avoid clogging the market ndash Decision three years
bull How much information ndash Should be commercially useful ndash Decision date unit energy source
13
Competition among developers
bull Nondiscriminatory access to ERCOT transmission system
bull RPS was a guaranteed minimum demand but no one was guaranteed a piece of the pie
bull Green power could make the pie bigger as long as prices were reasonable
14
RPS and green power
bull Need to ensure customers have quality information for making choices that satisfy their diverse preferences
bull Need to protect customers against deceptive trade practices
15
Information for consumer choice
bull All REPs are required to provide eachresidential and small commercial customer with an Electricity Facts Label(EFL) describing the service purchased
bull Customers can find and compare all EFLs on the PUC web site ndash wwwpowertochoseorg
16
17
EFL for typical service
18
EFL for green power
Deceptive trade practices
bull Problem of fraudulent double-counting ndash A REC is a private good (ie exclusive and
rivalrous) ndash A customer buying a REC (or service backed by it)
expects full and exclusive entitlement to the powerit represents That expectation is violated ifanother party appropriates value from that sameREC The customer is harmed because the premium paid no longer conveys exclusive value
19
Deterrents to deceptive practices
bull Require RECs for green power ndash ldquo[T]he retirement of RECs shall be the only
method of authenticating generation forwhich a REC has been issuedrdquo
bull Prohibit loading RPS onto one productand selling it as green power ndash Mandatory RECs must be applied pro rata
to each EFL
20
Current issues CREZs
bull Current RPS contains both a mathematically allocated mandate (5 GW by 2015) and a target (10 GW by 2025)
bull PUC has identified CREZs which will expedite new transmission to connect wind power to load ndash Scenarios under study will accommodate up to 25
GW of installed wind power
21
Current issues non-wind target
bull 2005 legislation increasing the RPSalso set a target for non-windrenewables (500 MW) ndash Unclear whether law authorized non-wind
mandate ndash Chosen strategy provide RPS premiums in
addition to RECs for eligible non-wind renewables
22
Lessons learned
bull Real goal is renewable energy that is economicallysustainable
bull Competition works bull An RPS REC tracking and green power are best
implemented as package bull RPS goal should leave room for green power to grow bull Rules must be stable
23
Questions
David Hurlbut PhD National Renewable Energy Laboratory
david_hurlbutnrelgov
Major REC design decisions
bull How long should they be valid ndash Long enough to enable risk management ndash Short enough to avoid clogging the market ndash Decision three years
bull How much information ndash Should be commercially useful ndash Decision date unit energy source
13
Competition among developers
bull Nondiscriminatory access to ERCOT transmission system
bull RPS was a guaranteed minimum demand but no one was guaranteed a piece of the pie
bull Green power could make the pie bigger as long as prices were reasonable
14
RPS and green power
bull Need to ensure customers have quality information for making choices that satisfy their diverse preferences
bull Need to protect customers against deceptive trade practices
15
Information for consumer choice
bull All REPs are required to provide eachresidential and small commercial customer with an Electricity Facts Label(EFL) describing the service purchased
bull Customers can find and compare all EFLs on the PUC web site ndash wwwpowertochoseorg
16
17
EFL for typical service
18
EFL for green power
Deceptive trade practices
bull Problem of fraudulent double-counting ndash A REC is a private good (ie exclusive and
rivalrous) ndash A customer buying a REC (or service backed by it)
expects full and exclusive entitlement to the powerit represents That expectation is violated ifanother party appropriates value from that sameREC The customer is harmed because the premium paid no longer conveys exclusive value
19
Deterrents to deceptive practices
bull Require RECs for green power ndash ldquo[T]he retirement of RECs shall be the only
method of authenticating generation forwhich a REC has been issuedrdquo
bull Prohibit loading RPS onto one productand selling it as green power ndash Mandatory RECs must be applied pro rata
to each EFL
20
Current issues CREZs
bull Current RPS contains both a mathematically allocated mandate (5 GW by 2015) and a target (10 GW by 2025)
bull PUC has identified CREZs which will expedite new transmission to connect wind power to load ndash Scenarios under study will accommodate up to 25
GW of installed wind power
21
Current issues non-wind target
bull 2005 legislation increasing the RPSalso set a target for non-windrenewables (500 MW) ndash Unclear whether law authorized non-wind
mandate ndash Chosen strategy provide RPS premiums in
addition to RECs for eligible non-wind renewables
22
Lessons learned
bull Real goal is renewable energy that is economicallysustainable
bull Competition works bull An RPS REC tracking and green power are best
implemented as package bull RPS goal should leave room for green power to grow bull Rules must be stable
23
Questions
David Hurlbut PhD National Renewable Energy Laboratory
david_hurlbutnrelgov
Competition among developers
bull Nondiscriminatory access to ERCOT transmission system
bull RPS was a guaranteed minimum demand but no one was guaranteed a piece of the pie
bull Green power could make the pie bigger as long as prices were reasonable
14
RPS and green power
bull Need to ensure customers have quality information for making choices that satisfy their diverse preferences
bull Need to protect customers against deceptive trade practices
15
Information for consumer choice
bull All REPs are required to provide eachresidential and small commercial customer with an Electricity Facts Label(EFL) describing the service purchased
bull Customers can find and compare all EFLs on the PUC web site ndash wwwpowertochoseorg
16
17
EFL for typical service
18
EFL for green power
Deceptive trade practices
bull Problem of fraudulent double-counting ndash A REC is a private good (ie exclusive and
rivalrous) ndash A customer buying a REC (or service backed by it)
expects full and exclusive entitlement to the powerit represents That expectation is violated ifanother party appropriates value from that sameREC The customer is harmed because the premium paid no longer conveys exclusive value
19
Deterrents to deceptive practices
bull Require RECs for green power ndash ldquo[T]he retirement of RECs shall be the only
method of authenticating generation forwhich a REC has been issuedrdquo
bull Prohibit loading RPS onto one productand selling it as green power ndash Mandatory RECs must be applied pro rata
to each EFL
20
Current issues CREZs
bull Current RPS contains both a mathematically allocated mandate (5 GW by 2015) and a target (10 GW by 2025)
bull PUC has identified CREZs which will expedite new transmission to connect wind power to load ndash Scenarios under study will accommodate up to 25
GW of installed wind power
21
Current issues non-wind target
bull 2005 legislation increasing the RPSalso set a target for non-windrenewables (500 MW) ndash Unclear whether law authorized non-wind
mandate ndash Chosen strategy provide RPS premiums in
addition to RECs for eligible non-wind renewables
22
Lessons learned
bull Real goal is renewable energy that is economicallysustainable
bull Competition works bull An RPS REC tracking and green power are best
implemented as package bull RPS goal should leave room for green power to grow bull Rules must be stable
23
Questions
David Hurlbut PhD National Renewable Energy Laboratory
david_hurlbutnrelgov
RPS and green power
bull Need to ensure customers have quality information for making choices that satisfy their diverse preferences
bull Need to protect customers against deceptive trade practices
15
Information for consumer choice
bull All REPs are required to provide eachresidential and small commercial customer with an Electricity Facts Label(EFL) describing the service purchased
bull Customers can find and compare all EFLs on the PUC web site ndash wwwpowertochoseorg
16
17
EFL for typical service
18
EFL for green power
Deceptive trade practices
bull Problem of fraudulent double-counting ndash A REC is a private good (ie exclusive and
rivalrous) ndash A customer buying a REC (or service backed by it)
expects full and exclusive entitlement to the powerit represents That expectation is violated ifanother party appropriates value from that sameREC The customer is harmed because the premium paid no longer conveys exclusive value
19
Deterrents to deceptive practices
bull Require RECs for green power ndash ldquo[T]he retirement of RECs shall be the only
method of authenticating generation forwhich a REC has been issuedrdquo
bull Prohibit loading RPS onto one productand selling it as green power ndash Mandatory RECs must be applied pro rata
to each EFL
20
Current issues CREZs
bull Current RPS contains both a mathematically allocated mandate (5 GW by 2015) and a target (10 GW by 2025)
bull PUC has identified CREZs which will expedite new transmission to connect wind power to load ndash Scenarios under study will accommodate up to 25
GW of installed wind power
21
Current issues non-wind target
bull 2005 legislation increasing the RPSalso set a target for non-windrenewables (500 MW) ndash Unclear whether law authorized non-wind
mandate ndash Chosen strategy provide RPS premiums in
addition to RECs for eligible non-wind renewables
22
Lessons learned
bull Real goal is renewable energy that is economicallysustainable
bull Competition works bull An RPS REC tracking and green power are best
implemented as package bull RPS goal should leave room for green power to grow bull Rules must be stable
23
Questions
David Hurlbut PhD National Renewable Energy Laboratory
david_hurlbutnrelgov
Information for consumer choice
bull All REPs are required to provide eachresidential and small commercial customer with an Electricity Facts Label(EFL) describing the service purchased
bull Customers can find and compare all EFLs on the PUC web site ndash wwwpowertochoseorg
16
17
EFL for typical service
18
EFL for green power
Deceptive trade practices
bull Problem of fraudulent double-counting ndash A REC is a private good (ie exclusive and
rivalrous) ndash A customer buying a REC (or service backed by it)
expects full and exclusive entitlement to the powerit represents That expectation is violated ifanother party appropriates value from that sameREC The customer is harmed because the premium paid no longer conveys exclusive value
19
Deterrents to deceptive practices
bull Require RECs for green power ndash ldquo[T]he retirement of RECs shall be the only
method of authenticating generation forwhich a REC has been issuedrdquo
bull Prohibit loading RPS onto one productand selling it as green power ndash Mandatory RECs must be applied pro rata
to each EFL
20
Current issues CREZs
bull Current RPS contains both a mathematically allocated mandate (5 GW by 2015) and a target (10 GW by 2025)
bull PUC has identified CREZs which will expedite new transmission to connect wind power to load ndash Scenarios under study will accommodate up to 25
GW of installed wind power
21
Current issues non-wind target
bull 2005 legislation increasing the RPSalso set a target for non-windrenewables (500 MW) ndash Unclear whether law authorized non-wind
mandate ndash Chosen strategy provide RPS premiums in
addition to RECs for eligible non-wind renewables
22
Lessons learned
bull Real goal is renewable energy that is economicallysustainable
bull Competition works bull An RPS REC tracking and green power are best
implemented as package bull RPS goal should leave room for green power to grow bull Rules must be stable
23
Questions
David Hurlbut PhD National Renewable Energy Laboratory
david_hurlbutnrelgov
17
EFL for typical service
18
EFL for green power
Deceptive trade practices
bull Problem of fraudulent double-counting ndash A REC is a private good (ie exclusive and
rivalrous) ndash A customer buying a REC (or service backed by it)
expects full and exclusive entitlement to the powerit represents That expectation is violated ifanother party appropriates value from that sameREC The customer is harmed because the premium paid no longer conveys exclusive value
19
Deterrents to deceptive practices
bull Require RECs for green power ndash ldquo[T]he retirement of RECs shall be the only
method of authenticating generation forwhich a REC has been issuedrdquo
bull Prohibit loading RPS onto one productand selling it as green power ndash Mandatory RECs must be applied pro rata
to each EFL
20
Current issues CREZs
bull Current RPS contains both a mathematically allocated mandate (5 GW by 2015) and a target (10 GW by 2025)
bull PUC has identified CREZs which will expedite new transmission to connect wind power to load ndash Scenarios under study will accommodate up to 25
GW of installed wind power
21
Current issues non-wind target
bull 2005 legislation increasing the RPSalso set a target for non-windrenewables (500 MW) ndash Unclear whether law authorized non-wind
mandate ndash Chosen strategy provide RPS premiums in
addition to RECs for eligible non-wind renewables
22
Lessons learned
bull Real goal is renewable energy that is economicallysustainable
bull Competition works bull An RPS REC tracking and green power are best
implemented as package bull RPS goal should leave room for green power to grow bull Rules must be stable
23
Questions
David Hurlbut PhD National Renewable Energy Laboratory
david_hurlbutnrelgov
18
EFL for green power
Deceptive trade practices
bull Problem of fraudulent double-counting ndash A REC is a private good (ie exclusive and
rivalrous) ndash A customer buying a REC (or service backed by it)
expects full and exclusive entitlement to the powerit represents That expectation is violated ifanother party appropriates value from that sameREC The customer is harmed because the premium paid no longer conveys exclusive value
19
Deterrents to deceptive practices
bull Require RECs for green power ndash ldquo[T]he retirement of RECs shall be the only
method of authenticating generation forwhich a REC has been issuedrdquo
bull Prohibit loading RPS onto one productand selling it as green power ndash Mandatory RECs must be applied pro rata
to each EFL
20
Current issues CREZs
bull Current RPS contains both a mathematically allocated mandate (5 GW by 2015) and a target (10 GW by 2025)
bull PUC has identified CREZs which will expedite new transmission to connect wind power to load ndash Scenarios under study will accommodate up to 25
GW of installed wind power
21
Current issues non-wind target
bull 2005 legislation increasing the RPSalso set a target for non-windrenewables (500 MW) ndash Unclear whether law authorized non-wind
mandate ndash Chosen strategy provide RPS premiums in
addition to RECs for eligible non-wind renewables
22
Lessons learned
bull Real goal is renewable energy that is economicallysustainable
bull Competition works bull An RPS REC tracking and green power are best
implemented as package bull RPS goal should leave room for green power to grow bull Rules must be stable
23
Questions
David Hurlbut PhD National Renewable Energy Laboratory
david_hurlbutnrelgov
Deceptive trade practices
bull Problem of fraudulent double-counting ndash A REC is a private good (ie exclusive and
rivalrous) ndash A customer buying a REC (or service backed by it)
expects full and exclusive entitlement to the powerit represents That expectation is violated ifanother party appropriates value from that sameREC The customer is harmed because the premium paid no longer conveys exclusive value
19
Deterrents to deceptive practices
bull Require RECs for green power ndash ldquo[T]he retirement of RECs shall be the only
method of authenticating generation forwhich a REC has been issuedrdquo
bull Prohibit loading RPS onto one productand selling it as green power ndash Mandatory RECs must be applied pro rata
to each EFL
20
Current issues CREZs
bull Current RPS contains both a mathematically allocated mandate (5 GW by 2015) and a target (10 GW by 2025)
bull PUC has identified CREZs which will expedite new transmission to connect wind power to load ndash Scenarios under study will accommodate up to 25
GW of installed wind power
21
Current issues non-wind target
bull 2005 legislation increasing the RPSalso set a target for non-windrenewables (500 MW) ndash Unclear whether law authorized non-wind
mandate ndash Chosen strategy provide RPS premiums in
addition to RECs for eligible non-wind renewables
22
Lessons learned
bull Real goal is renewable energy that is economicallysustainable
bull Competition works bull An RPS REC tracking and green power are best
implemented as package bull RPS goal should leave room for green power to grow bull Rules must be stable
23
Questions
David Hurlbut PhD National Renewable Energy Laboratory
david_hurlbutnrelgov
Deterrents to deceptive practices
bull Require RECs for green power ndash ldquo[T]he retirement of RECs shall be the only
method of authenticating generation forwhich a REC has been issuedrdquo
bull Prohibit loading RPS onto one productand selling it as green power ndash Mandatory RECs must be applied pro rata
to each EFL
20
Current issues CREZs
bull Current RPS contains both a mathematically allocated mandate (5 GW by 2015) and a target (10 GW by 2025)
bull PUC has identified CREZs which will expedite new transmission to connect wind power to load ndash Scenarios under study will accommodate up to 25
GW of installed wind power
21
Current issues non-wind target
bull 2005 legislation increasing the RPSalso set a target for non-windrenewables (500 MW) ndash Unclear whether law authorized non-wind
mandate ndash Chosen strategy provide RPS premiums in
addition to RECs for eligible non-wind renewables
22
Lessons learned
bull Real goal is renewable energy that is economicallysustainable
bull Competition works bull An RPS REC tracking and green power are best
implemented as package bull RPS goal should leave room for green power to grow bull Rules must be stable
23
Questions
David Hurlbut PhD National Renewable Energy Laboratory
david_hurlbutnrelgov
Current issues CREZs
bull Current RPS contains both a mathematically allocated mandate (5 GW by 2015) and a target (10 GW by 2025)
bull PUC has identified CREZs which will expedite new transmission to connect wind power to load ndash Scenarios under study will accommodate up to 25
GW of installed wind power
21
Current issues non-wind target
bull 2005 legislation increasing the RPSalso set a target for non-windrenewables (500 MW) ndash Unclear whether law authorized non-wind
mandate ndash Chosen strategy provide RPS premiums in
addition to RECs for eligible non-wind renewables
22
Lessons learned
bull Real goal is renewable energy that is economicallysustainable
bull Competition works bull An RPS REC tracking and green power are best
implemented as package bull RPS goal should leave room for green power to grow bull Rules must be stable
23
Questions
David Hurlbut PhD National Renewable Energy Laboratory
david_hurlbutnrelgov
Current issues non-wind target
bull 2005 legislation increasing the RPSalso set a target for non-windrenewables (500 MW) ndash Unclear whether law authorized non-wind
mandate ndash Chosen strategy provide RPS premiums in
addition to RECs for eligible non-wind renewables
22
Lessons learned
bull Real goal is renewable energy that is economicallysustainable
bull Competition works bull An RPS REC tracking and green power are best
implemented as package bull RPS goal should leave room for green power to grow bull Rules must be stable
23
Questions
David Hurlbut PhD National Renewable Energy Laboratory
david_hurlbutnrelgov
Lessons learned
bull Real goal is renewable energy that is economicallysustainable
bull Competition works bull An RPS REC tracking and green power are best
implemented as package bull RPS goal should leave room for green power to grow bull Rules must be stable
23
Questions
David Hurlbut PhD National Renewable Energy Laboratory
david_hurlbutnrelgov
Questions
David Hurlbut PhD National Renewable Energy Laboratory
david_hurlbutnrelgov